1. EU’s response and preparation for the EU-Korea FTA
Xavier Coget
Head of Trade section
EU Delegation to the Republic of Korea
June 2011

2. 1. What is in this FTA?

3. Swift tariff elimination for goods
70% of the duties (tariff lines) will be eliminated at day one
Almost all remaining duties (98.7% of the tariff lines) will be eliminated gradually over the remaining 5 years
For Korea a few sensitive items, mainly agricultural products, will benefit from longer transition periods and rice will not be liberalised
EU average applied tariffs are 6.5% and Korean average applied tariffs are 12.2%
Goods must respect rules of origin to benefit the preferential tariffs!

4. Korean exports to the EU
Tariff elimination for Korean exports
Korean exports to the EU
auto parts
wireless Device
refrigerators
mid and large cars
microwave ovens
synthetic resin
small cars
TV sets
cameras 4

5. Tariff elimination for EU exports
EU exports to Korea
auto parts
measuring instruments
wine
mid and large cars
pharmaceuticals
cosmetics
small cars
skin care
- plywood
- pork 5

6. Pharmaceuticals & medical devices
Elimination of certain non-tariff barriers
Consumer
Electronics
Mutual Recognition of Electromagnetic Compatibility & Electric safety Certificates
Automotive
Equivalence of Key EU and Korean Standards
Recognition of each other’s Certificates
Transparency and consultation of industry in decisions regarding reimbursement prices
Pharmaceuticals & medical devices 6

7. Service liberalisation
Shipping
market access, transparency
time
Telecoms
Financial
services
Legal
services 7

8. Strengthened rules Compe-tition rules Protection of IPR
e.g. anti-cartel 8

9. Other elements Efficient dispute settlement rules
Protocol on cultural co-operation
General safeguard clause
Efficient institutions 9

10. 2. Expected impact

11. EU and Korea 2 relatively complementary economies
main EU exports to Korea
main Korean exports to EU
36%
Service
10%
Cars
Machines
31%
23%
Ships 5%
Agri-goods
26%
Electronics 8%
Cars 11

12. Potential impact Double the trade on the long term12

13. Economic growth, job creation, consumer benefits, competition, investment
Income
GDP
Fair Competition 13

14. Summary
Most important FTA negotiated by EU or Korea. Bilateral trade and growth will be boosted
One study estimates that the FTA will increase bilateral trade by more than € Bn 30
On the short term:
Most competitive sectors of each side will immediately boost their exports while weaker ones will face tougher competition (adjustment cost)
Costs for consumers and users will decrease, boosting competitiveness of the 2 economies
On the longer term:
Increase of investment
Economies of scale / more efficient resource allocation
Opportunities for strategic partnerships
Emulation, innovation, technology transfer

15. 3. EU’s response and preparation

16. Adoption of FTA implementing legislation in the EU
Council Decision approving the provisional application of the FTA
Amendment of the TARIC database (EU custom duties database) to implement the liberalisation schedule
EU Safeguard Regulation (internal EU rules on how to operate the bilateral FTA safeguard)
Commission Regulation/Decision with specific rules to implement the Rules of Origin derogations
Protection of Korean Geographical Indications
Several other EU legislation are implementing commitments in the service sector of IPR

17. Communication and pedagogic efforts towards businesses and governments
Organization of / participation to several information seminars for businesses and EU Governments
Publication of several pedagogic materials (text of the FTA, summary, reading guide, Powerpoint presentations)
Specific targeted pedagogic and communication efforts by EU Member States administrations (e.g. National customs for the approved exporters’ status and rules of origin)
Press activity and celebration events end June / early July

18. Institutional set-up / relations with the Korean Government
Reinforcement of EU officials operating trade relation with Korea
Intensification of contacts and cooperation with Korean Government / monitoring of Korea’s FTA implementation
New institutional set-up for FTA implementation (13 EU-Korea Committees and Working Groups will meet at least once a year to operate the FTA)
More contacts with EU industry through the usual channels